WAM's here to help: Marketing
Carrying out market analysis is imperative for any business of any size when writing their business plan. This section of your business plan will ensure you know your market and will make it clear whether the market is large enough for you to run a sustainable business within it.
In basic form your market analysis is a quantitive and qualitive assessment of a market. It looks at the size of the market in terms of both volume and its value, the various customer segments and buying patterns, the competition and the economic environment.
Your market analysis will allow you to become familiar with all aspects of the market, so the target market can be defined, and the company can be positioned in to understand its potential share of sales.
To be able to carry out a realistic market analysis you need to know your product inside out, we would recommend looking at it in the following way:
- What is your product?
- How do you describe it?
- What differentiates it from others in your market?
- Why should consumers buy your product or service and not that of your competitors?
- Is their demand for your product or service, and if so is the demand growing, falling or static?
Hand in hand with the market comes your competitors. Within your competitor analysis you need to ensure you research at length exactly who your competitors are. Look at their strengths and weaknesses, look at strategies that will give you a distinct advantage, the barriers that could be developed to stop competitors from entering your market and any weaknesses within the product development cycle which could be exploited.
Their strengths - this could be price, service or convenience. Their weaknesses - these could be your potential opportunities. What are their basic objectives - to gain market share, attract premium clients? What is it your competitors are trying to achieve? How can you take from their market share? To gather information on each of your competitive takes a lot of time and effort but is a must to really understand your market.
There are a number or simple yet effective ways of gathering data which would differ for each business, but these can be discussed on a case by case basis if you needed some help here.
Your target market is the served available market that your business aims to target (a smaller piece of the total available market) which your business has the resources to reach and service for the next few years.
By understanding your customers and what motivates them to make a purchase you can build your business around providing a solution to their needs.
Once you have looked at your customers you will have several customer segments and it is important to understand that your product or service will not be of equal interest to each of these segments as they don’t all have the same needs and characteristics.
Once you do have your customer segments this information can be used to create your different marketing plans, dealing with questions from distribution channels, various marketing activities, product USP’s and Price. Each segment will need a separate plan to ensure you are using the correct channels and mediums for that audience and their needs.
Depending on whether you are a start-up or an existing business it’s important to define specific characteristics about your desired customers. How you go about getting this information will be different if you are a start up in comparison to an existing business however ...
Key information to look at when defining your customer:
Demographics - Gender age, Family, Income Geographic - Location, Population Size, Type of area Psychographics - Social class, Lifestyle, Personality, Motivation And Interests - Hobbies, activities, what do they read, Organisations they support.
All these things will help you understand who your customers are and where you can find them.
If we were to look at a business plan for a start-up they may not have any existing customers so no base to draw that data from. Don’t assume you have to guess your target market will be though, there are a variety of ways you can determine information about your prospective customers.
Benefits - Clearly identify the benefits of your product and outline the type of people who would most need those benefits and essentially who would really desire your product.
Competitors - No matter what type of business you are planning for there will no doubt be someone else who is doing it. So, find these successful competitors and see who their customers are.
Locations of ads or marketing activity - Where are popular places that show ads for your type of business or service, who are they being shown to? This can give a good insight of who you likely customers may be and where you can find them.
The marketing strategy section of your business plan describes who your customers are and how you are going to get your message to them, it sets the overall direction and goals for your marketing.
Therefore, it is super important to put as much effort as possible into knowing who your target customers are. A lot of time, effort and money can be wasted if you are targeting the wrong customers or targeting them in the wrong way, through the wrong channels.
You will not just have one customer group and their interest in your product will not be equal, and your marketing strategy needs to reflect this.
As with all your business plan, within your marketing strategy you need to be very specific, you might have a customer base of people ranging from 25 - 75 but each of these customers behave differently, they purchase differently, and they certainly get their information differently, so it is best to break them into much smaller segments when looking at the best way to target each of them.
The best business idea has no chance of succeeding without a sound marketing and sales strategy, so it isn’t enough to say you are going to market your products online, you need to be much more specific:
Are you going to have a website? Will you be creating paid social campaigns? Are you running seasonal PPC campaigns? Will you be re-targeting? Will you be using Email marketing?
There are so many channels and elements to a Marketing strategy and it is imperative that you have chosen the right ones for your target audience. Most of online campaigns can be monitored and optimised daily and this is something that most certainly needs factoring in to your activity. There’s no use just setting an online campaign running and waiting to see if it has failed or succeeded at the end - time is wasted and money is spent at this point so constant monitoring of your activity is key.
Developing a marketing strategy for your business will help you make the most of your marketing investment, keep your marketing focused, and measure and improve your sales results so this is another key element to look at in your business plan.